Q2 2020 ICAD Inc Earnings Call
Dead dead dead dead.
Greetings, welcome to the iPad Incorporated second quarter 2020 earnings call at this time. All participants are in a listen-only mode a question-and-answer session will follow the formal presentation. If anyone should require assistance and conflicts, please press * 0 and 12 on combat. Please note this conference is being recorded. Oh now turn the conference over to your host Jeremy February. You may be good.
Thank you and good afternoon everyone. Thank you for participating in today's call joining me for my cat or Michael Klein chairman and chief executive officer. Stacy Stevens president lived in Staunton Arigato Chief Financial Officer earlier this afternoon. I can announce Financial results for the three months and six months and the June 30th 2020 before we begin I would like to caution the comments made during this conference call by management contain forward-looking statements and involve risks Ortiz regarding the operations and future results of iPad with a certain non-gaap Financial measures management believes that these measures provide meaningful information for investors and reflects the way that they do the operating performance of the company. You can view you can find a Reconciliation of our gang members burnings release.
I heard you to review the company's filings.
The Securities and Exchange Commission including without limitation forms 10-q and 10K which identifies specific risk factors that may cause actual results or events differ materially from those described in the foliage payment furthermore. The content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast May eleventh two thousand twenty. I'm sorry, August 4th 2020. I can and undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of the concert conference call with that said, it's my pleasure to turn the call over to Michael Klein off Mike.
Thank you, Jeremy and good afternoon everyone. I would like to preface today's Q2 earnings report by articulating the three key themes that we continue to operate under a Nike ad these are as follows theme one is unlocking and extending the embedded value of I catch detection and therapy business particularly by accelerating key value drivers that may indeed be enhanced by current market dynamics seem to is driving towards profitability and positive Cash Flow by optimizing our overall high-growth March and offerings off and by optimizing our balance sheet allowing for enhanced flexibility and seemed three is rapidly advancing the validation and introduction of our intraoperative aggravation therapy offering into the very large and opportune Market of treating glioblastomas or gbm's now to get more specific on our first theme that yep.
Accelerating value we clearly see a steady Improvement in ordering patterns and a customer base that has successfully adopted safe screening measures 9295 a site survey open for screening and this environment where productivity and efficiency are not only valued but are now demanded are profound AI capabilities are even more essential value of reducing radiologist reading Time by over 50% finding more cancers than without Rai software. And avoiding unwarranted callbacks is absolutely on our customers a guitar strings productivity has become equal to and in some cases has emerged as even more of a sales driver than clinical performance.
Delays and scream mammography for perhaps 90 days has been considered by many to be somewhat tolerable and often patient dependent now, however, almost five months into this pandemic screening delays and the Falls are widely seen as problematic. The rate of breast cancer is detected is broadly acknowledged to be about six cases per 1000 screens screening delays have clear implications as cancers progress and grow in severity. The number of detectable cases per 1,000 also increases with time delays and screening. This is a secondary and concerning effect of this pandemic a good illustration of what's essential need for profound AI for both the above-mentioned productivity and clinical performance is our June sale and shipment of 50 licenses to simonmed a Nationwide chain.
Medical Imaging provider and among the largest physician
Radiology practices in the US simonmed provides real-time screening feedback while patients are on site vastly improving the patient Healthcare experience. This cute to order is particularly noteworthy in that shipments were made to Hot Spot areas at a peak time in the course of this pandemic as John Choi founder and CEO of simonmed expressed in recent press release of earlier of several weeks ago quote icons technology empowers. Our goal is to read cases with improved accuracy reducing the rate of false positives and unnecessary call backs which can be pretzeled stressful for the patient wage additionally with profound AI every patient has the benefit of a second reader whose input has been clinically proven to support the early detection of breast cancers in making yep.
D mammography at simonmed even more beneficial for our patients unquote what what is now evident at all customers sites is that profound AI software is being deployed as an essential productivity and performance solution, which makes high-end medical Capital Equipment more productive more efficient and not even more cost-effective. We now repeatedly are getting the feedback that profound AI is providing an improved patient experience. It also provides sides with a clear pact marketing advantage and the ability to preferentially attract patients given the over 10,000 installed 3D Tomo systems in the us alone and fact that 750 profound systems have been installed into these three D systems. We are still at eighteen months after lunch in the early adoption phase of profound a birth.
I in the US with additional and growing Market opportunities for 2D and 3D a offerings outside the US there are well over 25,000 mammography Imaging systems that are profound AI offering can be installed into in the United States and in Europe and on a total worldwide basis, the number of potential installation opportunity wage is even greater. The reason why aren't of our mammography risk offering could not be more timely this new risk offering is distinct from I CAD software that detects chances on the day of the screening it will serve as an additional Revenue driver and an extension of profound a is offering furthermore the next generation of an even more precise AI software profound AI software is in its final phases of pre-launch evaluation this generation Next Generation.
in a profound AI software is designed to
Further enhance productivity and clinical performance and is based on three hundred percent more data derived from both our recent 750 profound AI installation wage and 6,500 earlier generation software installations the adoption of profound in many large volume screening sites offers us ever expanding access to Patient data. This is a key differentiator for us and fuels our ability to rapidly introduce additional revenue-generating offerings moving on to fame number to beginning in Q2. We proactively reprioritize read applied and implemented appropriate cost reductions to align the what we saw as an ensuing disruption in ordering patterns. This strategy served us well in Q2 as we sequentially reduced our operating expenses 21% from q1 of this year. We continue age
Diligently manage costs and in fact have become more productive than even before as we focus on near-term Revenue optimization return on invested time and appropriate expects management as well as optimizing our balance sheet and having 24 million of cash dollars of cash, which certainly allows us for increased operational flexibility in terms of product development efforts. It is worth highlighting that before cue to our technology research and development team operated predominantly on a virtual bassist the additional Time Savings of travel time and costs trade shows and many inefficient time-consuming meetings has given way to higher efficiency work Dynamic with shopping deadlines Milestone Sprints and production yields that if allowed us to hit aggressive product release time lines are new risks product offering that stays home.
Further detail is a good example of hitting aggressive timelines. This takes us to a third and final theme the exciting Market opportunity in in intraoperative radiation therapy with soft treatment of glioblastoma has as previously mentioned are the most common and aggressive type of malignant primary brain tumor with a medium survival of thousand and two twelve months with almost 300,000 annual new cases of brain and nervous system cancers. This is a very large and opportune application for soft technology. It's significantly expands our Global addressable Market at the American Society of clinical oncology in May R. Glioblastoma data was introduced with results in both overall survival and progression-free survival that far surpassed the trial control arm. We have been able to cross the two year survival threshold for the for a disease. That is often fatal.
Less than one year updated results.
Through may have now been submitted for Journal publication and embargo data is anticipated to be released this coming fall. The above glioblastoma study results has been a tractor the attention of top academicians key opinion leaders and practitioners from luminary sites around the globe. Just three weeks ago in a landmark development fours off. We gathered 18 highly esteemed Physicians represented by top neuro-oncologist radiation oncologists and neuroses neurosurgeons in a coalition of what we call our GBM expert panel building clinical consensus and further validation of our GM capability is a key objective for us. This expert panel will be in a mental in the multi side us and European evaluation trial that will commence this year. This effort is designed to further validate the efficacy of birth.
Capability and is expected to enhance the commercial viability and Adoption of our GM technology worldwide and it is worth reiterating that our GM offering wage is an fda-cleared product and is commercially available today. The commencement of the aforementioned study will be an important driver of our go-to-market commercial efforts that will run in parallel with our clinical efforts. We are also very pleased to announce that dr. Santosh kesari will be leading our neurosurgery efforts as we drive towards clinical sites alone, no consensus trial in points and patient selection criteria doctor. Kesari is a neuro-oncologist at the John Wayne cancer center and has been a lead investigator on many brain cancer studies doctor khesari leads the comprehensive glioblastoma and translational medicine efforts for the Providence system in Southern, California, which is comprised.
Is the way over 20 Ki medical facilities. He is also on The Advisory Board of the American brain tumor foundation and and Alum of Dana-Farber and Harvard University Medical School. We are delighted and honored to have dr. Sorry work closely with us and let me close by summarizing the above 3 points at this time one. We are continuing to unlock the exact value in our in both our detection in therapy businesses. We anticipate that Rai detection business will continue to grow and importance as health care sites drive towards Detroit performance and increasingly prioritize productivity and efficiency tools. The value proposition of offering is enhanced with these well-articulated wage requirement to as a result of our operational discipline and productivity improvements. We will generate clear leverage as Revenue opportunities, continue and steadily. Yep.
materialize and cost
Management efforts are sustained and three with a strong balance sheet and significant Market opportunity and brain cancer treatment. We will continue to both validates off technology package generate high level awareness in the neurosurgery community that will pave the way for both clinical and Commercial adoption on a global basis in Psalm. We are well-positioned with our highest value Charles resolution and profound Ai and with targeted therapy Investments and and key clinical application areas such as glioblastoma that will offer very considerable future growth opportunities and in doing so will enhance shareholder value. I'd like to now turn the call over to our Chief Financial Officer Scott Lovato Scott off.
Good afternoon, everyone and thank you Mike. Now summarize that Financial results for the second quarter ended June thirtieth twenty twenty as Mike mentioned during the quarter month. We remained focused on aligning our operating expenses with Revenue expectations. Total revenues were 5.6 million in the second quarter. However, sequentially detection refuse a four point 1 million for Q2. We're down $400,000 or 8% from q120 with overall revenues declining 15% import on a sequential basis from q1 twenty-twenty operating expenses decreased 21% on a quarter-over-quarter basis, second-quarter revenues of 5.6 million declined 1.8 million or 24% as compared to seven point three million in the second quarter of 2019.
Detection Revenue declined 1.1 million from 5.2 million to 4.1 million or 21% on a quarter-over-quarter basis versus Q2 2019 due primarily to stay at home owners and a general shut down throughout the country that persisted through much of the second quarter. However, the unique clinical and workflow value of found a i continues to be realized by our customers moving on to gross profit on a percentage basis gross profit was 78% for both the second quarter of 2020 and 2019, which reflects the proactive steps. We took to realign our cost structure on a pure dollar basis gross profit for the second quarter of 2012 was 4.4 million as compared to 5.7 million in the second quarter of 2019 going forward. We will continue to align the cost of sales with corresponding Revenue wage.
Just and we will continue to appropriately manage our cost structure.
Operating expenses were six point seven million for the second quarter ended June 30th, 2020 a 7% decrease from the 7.2 million in the second quarter of 2019.
and
A decrease of 21% as compared to the first quarter of 2020 as we set on our last call we executed cost mitigation efforts to align our cost structure in response. He expected impacted covid-19 on the company which included salaries travel Marketing sales and other targeted cost areas including costs that may be associated with less immediate objectives. However, these objectives can readily be re-established as market dynamics improve overall. We are pleased with the execution of our cost-cutting measures in the second quarter that as mentioned will continue to be managed as we progress. However, as Mike indicated we intend to continue to appropriately invest in targeted off such as brain cancer to generate future opportunities and increase shareholder value.
Now on the prophet metrics gaap net loss for the second quarter of 2020 reflects an improvement of one point 1 million to a loss of two point four million or eleven cents per diluted share compared with a gaap net loss of three point five million or Twenty cents per diluted share for the second quarter of 2019. However, 919 includes the loss on the fair value of the debentures non-gaap adjusted net loss for the second quarter was 2.5 million or $0.12 per diluted share compared with a non-gaap adjusted net loss of 1.6 million or $0.09 per diluted share for the second quarter of 2019.
Non-gaap adjusted ebitda for the first quarter of 2020 was the loss of 7 million which represented a point three million Improvement compared to the second quarter 2019 non-gaap, but just to keep it a loss of 1 million again a net income and ebitda our entire reflective of our efforts to align expenses with Revenue expectations.
Moving on to the balance sheet as of June 30th 2020 the company had cash and cash equivalents of 24.2 million a significant Improvement compared to cash and cash equivalents 15.3 million at December 31st, 2019 as a reminder in April. We issued approximately 1.6 million shares of common stock with net proceeds of 12.3 million in an equity offering with a group of high-quality institutional investors.
With a strong cash balance and operational flexibility. I cat is well-positioned to continue to advance the strategy that Mike outlined. This concludes the financial highlights of our presentation, and I'd like to turn the call over to Stacey Stacey.
Thank you, Scott and good afternoon. Everyone. Well, despite the short-term on the post by covid-19 and Q2. We continue to be optimistic that we will see a strong bounce-back in both segments of our business with what we believe will be an enhanced competitive position due to the pandemic. We are seeing Trends emerging that are defining new unmet needs and Cancer Care off among these include an urgent need for a I enabled Imaging to help clinicians more easily manage the enormous backlog of mammograms now estimated to be as high as eight to ten million as a result of decreased cancer screening over the course of several months earlier this year additionally the need for our 10-minute procedure to treat breast cancer has been further Amplified during this time when minimizing patient exposure to the hospital remains Critical with that. I'm pleased to provide you with updates around our initiatives, which we believe address these dead.
That needs and will enable us to be.
Successful and accelerating our growth and expanding our Global footprint we continue to experience strong interest and positive feedback from existing and potential customers on the left hand side of our business demand for profound AI continues to grow on a global scale based on the strong clinical and economic value proposition of this leading-edge solution, but in some cases covid-19 has elongated the sales cycle our sales pipeline continues to grow with both deferred orders and newly emerging opportunities with the use of our technology expanding system-wide among a large customers such as Jefferson Radiology and Simon met which micro referenced as one of the largest outpatient Medical Imaging providers and largest position Radiology practices in the United States.
As I noted on our last call while the pandemic continues to prevent challenges with a number of trade shows and other events being canceled or going virtual and introducing unprecedented obstacles for our sales force. We have taken a very proactive approach to combat these issues which in many ways has actually proven to be even more successful than some of our traditional marketing approaches. Our marketing team has continued to step in as a strong sales engine generating qualified leads through a significant number of educational webinars and strategic digital marketing initiative these programs continue to succeed in attracting large audiences of attendees with measurable engagement including driving increased traffic to our website and social media channel and resulting in an overwhelmingly positive response among the participants.
Other events in the first half of the Year featured leading experts and breast cancer detection and treatment with the goal of highlighting the benefits. I had technology offered during this unique time. I am beyond. I'd like to specifically highlight the virtual Round Table event. We hosted for clinicians in early June titled the impact of covid-19 on breast cancer surgery and targeted radiation therapy this free virtual webinar provided a forum for leading breast cancer experts hailing from several leading institutions across the u.s. To share best practices and discuss the emerging emerging need for targeted radiation such as i o r t as a way to optimize workflow and minimize covid-19 exposure to patients and clinicians. The event was exceptionally well-attended with positive engagement among a number of key industry Professionals in the days that followed
Importantly we are now measuring return-on-investment from these webinars specifically on Revenue impact with key performance indicators being tracked through sales force and other platform to defend we now have the ability to track the number of the generated by our webinar and can actually quantify pipeline dollars attributable to these events in Iraq alone. We generated more sales leads from our virtual programming than we generated in all of 2019 at in-person trade shows. So while we are still early in the implementation of these analytical tools, we are clearly seeing a significant impact on our pipeline resulting from these virtual events.
No.
Outside of the US in Europe most countries suspended mammography screening during April and May however, I continued push into the public sector of France yielded results as this sector actually continue to purchase during the pandemic. We are also seeing the public sector pushed to include for 3D Thomas emphasis in most tender requirements. We off please say all of the market development Investments who made in 2019 are now bearing fruit. We are executing a multi-channel strategy in Europe, utilizing both OEM and distributors in a position to our direct team and we now have distribution coverage in more than twenty countries with recent additions in Switzerland and Serbia and final negotiations occurring with partner in the nordics the UK and Germany in the Middle East North Africa region partner discussions are advancing in Saudi Arabia and Morocco in order to manage the flourishing distribution. Yep.
Internships and ensure we are proactively leveraging them. We have now hired an experienced individual to manage our distributor relationships throughout this region. We continue to be extremely pleased with our strong performance in these markets and looking ahead. We expected our expansion outside the US will increasingly become an invaluable growth driver for the company.
I am also so excited to discuss the recent launch of profound a i risk at the virtual European Congress of radiology meeting. This is the first and only commercially available a whole decision support tool which resulted from our collaboration with the prestigious. Karolinska Institute in Stockholm Sweden. One of the world's foremost medical research universities.
Profound AI risk uniquely combined age breast density and subtle mammographic changes including those that the human I just cannot see resulting in a highly doubt that 2-year risk estimation the score from profound a i risk and Powers clinicians to truly personalized a woman's short-term screening strategy moving brain cancer screening from what has historically been in Age based screening Paradigm to now a risk adapted screening Paradigm unique to each woman profound AI risk is not available for 2D mammography and our initial release is focused on Europe with a follow-on 3D release early and 20-21 globally.
Now turning to our therapy business. We are really pleased with the progress. We have made to expand the software platform into new clinical application areas and particularly with the check and see if it's relative to advancing our neuro strategy that Mike referred to clinical studies are continuing to advance examining the use of electric priority and the wage various types of brain tumors at prestigious sites such as the James Graham Brown Cancer Center at the University of Louisville and the European Medical Center in Moscow, one of the largest private medical clinics in Russia, and an international leader in comprehensive care and oncology along with progressing our clinical study strategy formulating our Advisory board and the continued cock momentum on the data front. I was extremely pleased to announce the addition of Jeffrey to our team as senior vice president and general manager manager of ours off to business. I am very wage.
confident but Jeff will play a significant role in accelerating our therapy strategy and commercialization at
Globally, and as we look to expand clinical research to more leading institutions worldwide, so in summary in the face of an operating market place that has presented many countries with unforeseen challenging our team remains steadfast in our mission to identify and seize opportunities that continue to position I Cad and its technology as leading Force within the industry with Trends beginning to now improve. We have multiple growth engines in several key catalysts expected over the coming quarters, and we continue to achieve meaningful progress towards creating a sustainable leadership position for I CAD driving long-term growth and generating significant shareholder value now, we will open the call for questions operator.
I just I will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad reconfirmation told Will indicate your lines in the question mm start to if you would like to remove your question from the key participants using speaker equipment. It may be necessary to pick up your handset before pressing the star Keys. One moment, please while we pull for questions.
And our first question is from Dave directly from JMP Securities, please we'll see what your question.
Great. Thanks. I just wanted to follow-up comment that you made I thought I heard you say ninety to ninety-five percent of the sites are open. I think that's a little above we expected to be determined did someone through put in the past and I was just curious as to where that is. I guess what I'm trying to sort of figure out is where consumer confidence where the patience confidence off this point. Are they feeling better and and and returning to get their screens done more consistently now? Yeah, it's a good question Dave the dead of the ninety to ninety-five percent is the number that we're very confident in and it's been confirmed by others who are looking at the industry as we are the the way that size have prepared for screening. It's not only with the appropriate safety equipment, but they've also went in there work days instead of beginning at let's say eight or nine and go into 5 to start birth.
Earlier and going longer and into the evening and on Saturdays and they're doing this to allow for patient Comfort safety comfort so they can treat them instead of what may have been a typical Cadence of for patients an hour, maybe down a two or three to provide, you know, cleaning and scrubbing and patient Comfort. It's still accommodate the patients. So they've extended the workday patients are you know feeling as those safety measures are being put in place and I think that in combination with the purchasing concerned that the longer this goes the more at risk one becomes particularly, if one is in a higher or moderate the high-risk category has allowed screening to check to bounce back in a way that we definitely did not see in the let's say April and first three weeks of May time.
Okay.
This is a follow up right there. I don't know if you're prepared or comfortable sort of talking about how the how the quarter went, you know was sort of from a monthly standpoint. But I imagine that the trough was early in the in the. I'm curious if you saw improvements say in May and then June and if any color you might want to add about if there was a continuing even into July month. Well, I certainly can comment on the on the on the second quarter and that with obviously a more Draconian time. Wage when you have sites that are closed down and are not screening patients and there aren't the physicians at those locations and everybody's kind of scampering to be a first responder and as we moved through through April and certainly well into May and started approaching Memorial Day. We started seeing things lightning up and Thursday.
We're getting the safety practices and measures in place and the need for productivity and see productivity and efficiency was leaning towards sort of a resumption in examining the very product that they were looking at before which was our profound product which can help as stated on a productivity and efficiency side not to mention the wages of sin performance. So we saw a clear upward trajectory, you know, you mentioned the in in from 8 till the end of the quarter you saw samet the simonmed order package. Which is a big one and boring, you know, borrowing some large-scale outbreaks beyond the regional flare-ups, you know, we we hope to continue to pay the the the Cadence that we saw in the back end of the second quarter. It's typical that the end of our quarters are bigger than the beginning of our cores, but there is a certain age
Amount of pent-up demand you might say and there are also some additional orders that may not have been in the pipeline at the beginning of Q2 that we added to the pipeline invite you to and we're unable to get all the way through the cell cycle by the end of June. So, I think that I think that largely off your question David, thank you for that and congrats on the expense management. I'll hop off. Thank you.
And our next question is from perasan with craig-hallum. Please proceed with your question.
Okay, great. Thanks. Good afternoon everybody. So I'm going to focus here a couple of questions on the on the therapy side. Actually if I could be the glioblastoma data, that was at the gas covert will U Symposium was I thought fantastic and certainly look forward to seeing the the formal publication of the data and the fall are there are there plans or is there the ability to to kind of provide those continued interim looks on on say a three-month basis just because as we look at those those data, I think that they they they took me is very very potent given that the control arm. The clock is stopped running and in the soffit arm. It's obviously still going, you know, most recently for for still half the the not the cohort. So the the more opportunities to see that data age out the better just curious to to know what what your ability is to to to bring more of that to light as we go.
Yeah, they're that's that's a fair question. And as you know the results that were presented in Q2 reflected.
The GM performance as of the end of December and all of the patients in the control arm has passed by the end of September. So we continue to extend our lead and as I know your recall we did intend to be able to show our results at the end of March. And in fact, we have those results we continued to suck. It was also wherever in April and May and when we submitted for publication and we were going forward the most typically go for the most prestigious peer-reviewed publication. We can we have to make a trade-off of are we going to release our March information and potentially scoop our own headlines for Thursday May submitted publication and try to get the near-term win and potentially risk not getting accepted into the publication. So we made the call to go with our may result dead.
And those results have now been submitted and we expect to have them in in the fall now will say repair on an ongoing basis. We're not going to be submitting try. We're not to be submitting to prestigious journals every quarter because let's face it. This trial is really designed to get other neurosurgeons involved than where you could even some ways to help us recruit for the trial. So every 90 days is we go forward in our trial we are going to get into and results because we are looking at the disease-free progression which can be measured with em and other forms of you know, pet scans and other form of Damages. So we will have a regular Cadence of recruiting of reporting progression-free survival and our anticipated endpoints with the tow truck driver and progression-free survival that we could see at quarterly intervals.
Okay, that makes sense. I know there's been a lot of Conversation Over the last you know year or so as to the alternative payment model on the radiation oncology side curious as to what the latest you're hearing from your Liaisons in in Industry have to say about implementation and and that sort of thing and and if sites are beginning to you know have that on the radar something that they might have to be prepared for. I think we we probably agree that it it may not be a must-have so much as an accelerator, but it is something that a lot of people do ask about Thursday. So I figured I'd take this forum to to propose that to you guys too. Sure all of us. Look at this literally on a daily basis sometimes several times per day, but no one more than stage who I think has the refresh button on her computer kicking in every 30 minutes. So I'm going to turn this one to Stacey.
Yep, it might be faster than that night. But hype are so a couple of things. We don't how are you we don't have an update on the time for a publication of the final language of the Roa p.m. But we do know that with the release of the 20 21 physician Rule and the hospital outpatient rules that came last night and this morning and we did see the RO 8 p.m. Referenced right? So CMS indicated very clearly in those rules that they had fought about these Alternatives payment models in their analysis and they reiterated that they expected there will be a PM's in 2021 meeting meaning the one we're interested in the radiation oncology a.m. 8 p.m. And there are others as well. So we actually think that this gives further validation that we will see it implemented next year and we're seeing other radiation oncology companies weather in their job.
these reports or other public
Forms echoing that same sentiment right? So we do know that Astro has sent another letter to CMS in the last several weeks. And basically what it was was reiterating the same feedback that they had previously given CMS, right? So it was centered around potentially reducing the scope of mandatory participation, maybe making some changes in a payment methodologies and some changes to the reporting requirement. So it was basically the same feedback but they did make one additional request to which was to ask them for six months between the time they published the final language of the early p.m. And the actual implementation of it. So we don't know if they will be successful in increasing CMS in that regard but we do seem to continue to get further validation that this will be implemented in 20 21 as of today. It's still sitting in the we're dead.
Where it's been since March but I think that each month goes by we're starting to gather greater and greater confidence that we are going to see this implemented for next year. Our customers are talking about if you can imagine that we're you know, taking a a lead role in educating customers about it and what it will mean for them economically and and encouraging them to you know, prepare for that. Scenario. So we started that process a while back and continue to do that while we wait for the the final rule to be published.
Excellent, excellent, since you referenced other players within radiation therapy curious, you know philosophically Mike. If you have a point of see you on the on the tie up with Siemens in in Burien and what that might do as far as impacting the space if you see it having an impact on the space and and you know, how you might see me that that tie up, you know, signaling any particular attractiveness, I guess of radiation therapy and what that might mean for you as well. I would say that this was one of those things I didn't see coming right it's that I had imagined very end was pursuing its own destiny and would would be it was a great and other Technologies and potentially even serving as partners for others in let's say the radiation therapy ecosystem from what I've learned.
And I have communicated with some top people there. They believe they're going to continue to operate as an independent entity when I was running a portion of the radiation oncology business at Varian. We competed against Siemens and such as this is just existence a little bit ironic. But what Siemens did authors was access to International markets and I think that what is behind this in large part is that the growth of international markets potentially with the new reimbursement in place that station was referring to is seen as more attractive than the US market the goal of these roap MSR to take cost out of the system while improving quality of care and when I look at variance presentations investor presentations, they they show and it's been the case for almost a year they showed
Is dying of radiation therapy and the dollars coming from it.
You know flat on a project basis, I think same as has a very good footprint International and if you also look at varying they've made a number of Acquisitions under their CTS. I am operations in India and other parts of Asia trying to almost get into the actual delivery of care itself. So I think this reflects a growth opportunity with other International markets what I find interesting about that is that that is also our biggest growth opportunity for radiation oncology of our warranty is always found a home and and international because we could Healthcare economics favorite and of course our GM results was started in international. So I think we may be better aligned with wage. I would say that we're moving in parallel with this move towards. Oh you are well at the same time keeping our eye on the prize in terms of the radiation oncology. Apm's in the wage.
And we're certainly going to focus on glioblastoma in the United States as well as International. I think we still haven't seen the full Ripple effects of this. This is this is a very seismic shift in radiation oncology. It'll be interesting to see how they learn more about how others are responding who are there radiation therapy companies are going to respond.
Yep, makes sense. All right, I will I will let somebody else jump in. Thank you.
And again as a reminder if anyone has any questions, you may press star one on your telephone keypad doing so well have yourself entered into the cube. Next question is from Brooksville new with Lake Street Capital markets Place. See what your question.
Hi guys might just following on with the pears line of questioning with your experience at Berrien in your your knowledge of the industry over 30 years. Do you see that murder touching off or perhaps follow on consolidations within the industry wage? It's it's an interesting question. I do see one of the benefits of Siemens healthineers and their acquisition of them is that they're able to further integrate the Imaging aspects that that Siemens brings forward with the radiation therapy. The delivery aspects that very month has and I think to the extent that that gives them an advantage in the market for what we call Centre Technologies or DX TX Technologies.
Least to the extent to take it optimize that that may that may make others want to pursue a similar path. I can say I'm one of the things that we are we feel we're in a good position on is that although we haven't talked about this very much the AI driven a therapy is definitely been on the rise and Varian has been a a lead promoter of that basically looking at all the different treatment plans that can't be a can be upon the type of the stage of disease the nature of the patient in terms of demographics. And I think it's radiation therapy becomes more eccentric and approved with the therapy that puts us in a good position as well and potentially able to play a role linking up the therapy side of businesses with the Imaging side that the cut that occurred.
I do think that that this will be this may be the Vanguard of the of
Search to merge together whether it's companies or technologies that can both see it and treat it and optimize both the work and the interactive way with being part of it off. It's really interesting is you know, image-guided radiation therapy is one of the themes out there in the marketplace right now. So maybe that this is off a moving that direction speaking of competition, you know going all the way back to Astro in Chicago last year was, you know, one of them scenes I continue to said you guys are the only ones with an approved detection system in breast cancer and I'm curious if you could give up your observation about the competitive environment AI diagnostic products for breast and then a diagnostic products for any other type of cancer. You see out Thursday.
That's significant in breast cancer screening in terms of a clearances for the clinical. I used to read images real time, which is what the Physicians want to be able to have to look at certain T scores to be able to have any kind of measurement of the sensitivity and detection etcetera. We stand as one now of two players in the marketplace by that. I mean, of course, we got our approval it'll be two years in December. And in the first quarter of this year. We saw another player and international player operating out of New Zealand that is not receiving a technology developed from the Netherlands get approval we have now four months into birth.
Or let's say beyond that approval have not yet seen a commercial sale and no lost an account. In fact don't really see the competition and I thank you and part of it does not help folks coming into the market at the time of the pandemic and we got a headwind out there. So that's that's what we sell out there. And we we believe our calculations that we we have the full, you know, we don't know of any other installations fail job market.
Great. I have a couple more and I'll try to keep it short and sweet Stacy you concluded your remarks by saying you see a number of growth drivers in in Cadillacs in coming months and quarters, but without specifically following up and telling us what you see those being. So I was hoping without, you know going on too long. You could quickly tell us what you think of the big Catalyst. Do you have coming up that you think are going to be significant for I can
Yes.
Sure Brooks. So I think if you look at our product roadmap, we have some exciting things coming on both sides of the business, right? So I talked about the recent launch of profound a I am which initially it's focussed on the European market. I think we will see some Revenue impact from that in the European market in 2020. This will be fooled as an additional add-on module to a profound AI in that market and then once we finalize the development of profound a risk for 3D that will be a a global product that will be launching in the early part of 2021. And then we expect to see a much bigger impact from that particular product in in all geographies that we play in we're also working on improving the core profound AI algorithm itself. So improving the clinical performance even from where it is today, which is already, you know, quite effective but wage
I'll have as I think might mention his script about 300% more data to train that algorithm on from when we introduced profound AI so we've been able to make some further improvements in the clinical performance that you know will over time over time become a a a growth driver and then on the therapy side of the business, you know, as we continue to expect to these new clinical applications, you know while we are continuing to collect data and launch or a global clinical study for the neuro application. We still have an fda-cleared commercial products that we can begin to sell and and we do have some interest from customers. We're going to be launching our rectal applicator on the therapy side of this mess, right? So as we as we add new applications to the therapy system, you know, we continue to increase our addressable Market globally, right? So we have we have multiple things happening on birth.
Side to the business and that's only the start of them will be more in in 2021 and all of these collectively will you know, give us a lot of confidence and the growth continued growth prospects for the business office great. That's fantastic night to 1 simonmed one, maybe for Mike I guess and one for Scottsville for Mike. I was hoping you might just talk about whether you've seen any reaction from other, you know, multi-site radiation operators out there followed after simonmed and for Scott. I'm just curious 50 installations. It's seems like a significant number. Could you just talk a little bit about how you expect to recognize Revenue related to that and whether you see it in the material contributor to three Q or for Kia or sometime down the road. Thanks. Thanks a lot for taking my question my birth.
You want me to talk to you?
It was the first one here, then turn over to the second more financial question. Yeah, it's a very good point simonmed name is unique in that they are a early adopter for novel technologies that are Cutting Edge and they also are very forthright in presenting those Leading Edge Solutions in there in the markets that they operate in that is I need their business model. In fact, they actually took our technology and drove it into the on demand real-time real-time results and they do that because they're very patient-centric and they informed their communities of where they are what they're doing birth.
And as you sort of hinted at this has a corollary effect in the market women can choose where they want to get their their mammograms read and especially during times such as these if you can get results real time, if you're going to be having those results read by and get them instant instantaneously. This is Faith factor and they use that to their advantage and we know of many many cases where they've entered markets and can only other sites have been the first in market place and they have marketed their capabilities is such and it's generated corollary sales at other sites. And of course, we do provide material for them to be able to be used in the promotion of the technology, but they always like to customize it for themselves. So it does have that effect. If sort of the back end of that question, I'll turn it over to Scott.
Yeah. Hi Brooks. How are you? So, I've got both of that almost all of that recognized him cute to Brooks. So we shipped everything, you know at the time of order so not a significant amount in Q3. Okay. Thank you very much. And you know, it's it's riffic quarter in light of the pandemic and I can't wait to see the back half result dead.
Thanks God.
home
We have reached the end of the question and answer session around town trying to call back over to Michael Klein for any closing remarks. Well, thank you all for participating on today's call. I will I want to close by just reiterating the key the three key themes. I don't want to thank everybody for hanging with us for this call back and we will continue to unlock the embedded value in our detection and therapy business and we do in fact anticipate that the I business will continue to grow in importance and we are clearly things that are sites are driving towards improved detection performance and increasingly prioritizing productivity and efficiency. The value proposition of our kids are friends aren't happy with these articulated customer requirements and shed additional light on our offering Beyond even the clinical performance to as a result of the operational wage.
Discipline and productivity improvements. We will continue to generate clear.
Leverage as Revenue opportunities continue to steadily materialize and cost management efforts of sustained sustained and finally with a strong balance sheet over 24 million in cash and significant Market opportunities and brain treatments. We will continue to vote validates off technology and generate high levels of awareness in the neurosurgery community that will pave the way for both click on Commercial adoption on a global basis and some we are well-positioned as stated earlier with high-value software Solutions such as profound with new iterations and new products. In fact that go beyond just a texting today and also a targeted therapy investments in key clinical application areas such as GBM that again will enhance and provide food for all considerable growth opportunities and in doing so will enhance shareholder value and with that we close the call and I'd like to thank everybody very much for participating and being with us today.
And this concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.